The bombing, which took place on the outskirts of Peshawar, the capital of Khyber-Pakhtunkhwa province, also wounded four people, said Shafqat Malik, a senior police officer.

The bomb had apparently been planted under a bus seat, he said, adding that police were investigating. Malik would not speculate on who could be behind the bombing but described it as "an act of terrorism."

"Those who orchestrated the attack will not go unpunished," he said.

No one immediately claimed responsibility for the explosion, which came as the Pakistani military is waging a major offensive against the Taliban and foreign militants in the North Waziristan tribal region near Afghanistan.

The army says militants have been on the run since the June launch of the operation, which also displaced over 800,000 people. Most of the displaced have been living with relatives or at camps in the northwest.